Alzheimer’s Disease – A Long Term Care Planning Lesson
Mom is in her late 40’s and divorced. She owns her own home worth approximately $250,000 but with a substantial mortgage with a balance of $150,000. Probably describes a lot of people. Except that Mom has Alzheimerâs. While the disease mostly affects the elderly, early onset Alzheimerâs is not uncommon. It is hereditary and can hit people in their 30âs.
I received a call from Jane, her daughter. Mom canât work and has no income. The home is a mess and falling into disrepair because she can no longer take care of it. She is temporarily living with her father who is in his late 70âs. He pays the mortgage, taxes and upkeep on her home, although he is getting on in years and his health is failing. The family has no direction and is just living day by day with no idea when the nightmare will end.
Jane asked if we could help save the home. Could the home be transferred out of Momâs name? My answer, unfortunately, was no. âHow long ago was Mom diagnosedâ, I asked. Jane told me it was about 3 years ago. Mom refused to consider moving and Jane and her grandfather have been supporting Mom to this point but now they have reached a point where that is no longer possible.
So now the home is on the market. But after closing costs and paying off the mortgage there isnât much left. She was also hoping to recoup for herself and her grandfather the money they spent supporting Mom. Most importantly, there is the matter of providing care for Mom, hopefully in an assisted living facility at a cost of $4500 per month. When Momâs condition worsens the next step is a nursing home and that costs $9000 per month.
I sympathized with her but didnât have any magic solution. She simply waited too long before making what no doubt are tough decisions. So what should she have done?
3 years ago when the diagnosis was made is when the family needed to act. Selling the home and/or moving assets into a trust and out of Momâs name would have made sense. Because there is a 5 year lookback for Medicaid benefits the family would need to manage Momâs care and costs during that time period. But, managed correctly, they could have had assets left after 5 years, in trust, that could be used together with available government benefits to get the best care possible for Mom. They would have had options.
Now, they are selling a home falling into disrepair, in a down market. Not the best scenario for Mom who needs as much money as she can squeeze out of the sale to provide for her future care. A lesson for us all. If we delay making tough decisions they only get tougher.
I felt the despair in Janeâs voice. âHow can our country let this happen?â, she asked. I didnât have an answer for that one either.